Light & Wonder Pays Down Millions In Debt With Help Of Online Casino Games

Written By Nicholaus Garcia on August 10, 2022
Online casinos help light & wonder debt reduction

Despite a net loss for the second quarter, Light & Wonder ($LNW) has reduced its debt ratio, a positive sign for the newly transformed online casino company.

During the company’s earnings call, President and CEO Barry Cottle highlighted $LNW’s transformation while remaining optimistic for the remainder of 2022.

As of writing, shares of $LNW were trading at $54.50.

Debt reduction for online casino company Light & Wonder

Light & Wonder focuses on retail casino gaming as well as social and online casino games. Although it reported a net loss of $150 million, which is an increase from the $51 million in Q2 of 2021, there are a few positives. 

Light & Wonder’s CFO Connie James noted the company’s big win is its debt reduction. 

“The pace and scale of the business and financial transformation over the past year has been incredible. This quarter was no exception as our teams successfully closed on the Lottery business sale and refinancing transactions.”

James continued:

“Collectively, these transactions have transformed our balance sheet, enabling us to end the quarter with a net debt leverage ratio of 3.6x – seven turns lower than where we stood at the beginning of last year. With our reconstituted balance sheet, we have the financial flexibility to invest in our largest growth opportunities to drive the business forward.”

James said the company paid down $4.9 billion of debt in the quarter. LNW also bought back 3.7 million shares of common stock for $203 million.

LNW said it completed the sale of its lottery division, which gave the business $5.7 billion in gross cash. Furthermore, the sale of its sports betting division will come at a reduced cost of $750 million in cash and $50 million in Class A common stock. 

Combined, these sales will allow the company, formerly Scientific Games, to clear $4.9 billion of debt compared to Q1. 

“With the Lottery business sale and anticipated closing on the sale of our sports betting business by the end of the third quarter, we have achieved a significant milestone in the transformation of our organization,” Cottle said. 

Q2 financials for Light & Wonder

Total Q2 revenue stood at $610 million, up 5% year-over-year. The company’s gaming revenue grew 6% YoY to $390 million. LNW’s acquisition of Alictus helped the company’s gaming division, SciPlay, see a 4% revenue growth to $160 million. 

Additionally, a 47% growth in the US market helped online gaming operations enjoy $60 million of revenue. 

“We now have all the pieces in place and are singularly focused on building great games fully cross-platform,” Cottle said. 

“This quarter, we made tangible progress against our strategies as we delivered strong operating momentum and toplined growth in the quarter.”

He continued:

“The success we are seeing this quarter is the result of the fundamental changes we have made throughout the business. We couldn’t be more excited about the progress we are making and our path forward as the leading cross-platform global game company.”

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Nicholaus Garcia

Nick Garcia is a senior reporter for PlayUSA. Garcia provides analysis and in-depth coverage of the gambling industry with a key focus on online casinos, sports betting and financial markets. Garcia has been covering the US gambling market since 2017. He attended Texas Tech University as an undergrad and received a Master of Arts in Journalism from Columbia College Chicago.

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